PEFINDO: PT Timah Tbk rated “idA”, outlook revised to “stable”
Saturday, June 5 2021 - 03:27 PM WIB
(June 4, 2021)--PEFINDO has affirmed its “idA” ratings for PT Timah Tbk (TINS) and its Shelf-Registered Bond I, and also “idA(sy)” rating for its Shelf-Registered Sukuk Ijarah I. We revised the outlook for the corporate rating to “stable” from “negative” in response of TINS’ success to reduce its working capital requirement through supplier financing and its overpaid value-added tax acceleration, as well as its plan to reduce the tin ore production, particularly from its partner smelter, resulting a better financial leverage.
An obligor rated idA has a strong capacity to meet its long-term financial commitments relative to those of other Indonesian obligors.
However, it is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than higherrated obligors.
Suffix (sy) indicates the rating mandates Islamic principles compliance.
The corporate rating reflects TINS position as the largest tin mining permit (Izin Usaha Pertambangan/IUP) holder in Indonesia, vertically-integrated operations, and supportive regulations. These strengths are partly offset by its moderate capital structure, adequate cash flow protection measures, and its exposure to the volatility of tin prices.
The rating may be raised if TINS significantly improves its capital structure and strengthens its cash flow protection measures, followed by improvements in its cost position and business profile. The rating may be lowered if it incurs significantly higher debt than projected without being compensated by better business performance, and if the fluctuation of global tin price significantly impairs its revenue and/or profitability.
Founded in August 1976, TINS is a vertically integrated mining company in Indonesia focused on producing tin ingots. Its main mining operations are in Pangkal Pinang, Bangka Belitung. As of March 31, 2021, its A class shares were owned by the Indonesian government, and its B class shares by PT Indonesia Asahan Alumunium (Persero) (65.0%) and the public (35.0%). (ends)